-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, URAH5IsBnRaMEhr8AECp81qQDLNq4tFJAYWPcH6R/v9Ikb3cY2WjipD7N5gCqSEg r1p5cOcJgfnYtZ5O3ewX1Q== 0000927016-96-001663.txt : 19961113 0000927016-96-001663.hdr.sgml : 19961113 ACCESSION NUMBER: 0000927016-96-001663 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOFTDESK INC CENTRAL INDEX KEY: 0000916397 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 020390273 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-23098 FILM NUMBER: 96659341 BUSINESS ADDRESS: STREET 1: 7 LIBERTY HILL RD CITY: HENNIKER STATE: NH ZIP: 03242 BUSINESS PHONE: 6034285000 MAIL ADDRESS: STREET 2: 7 LIBERTY HILL CITY: HENNIKER STATE: NH ZIP: 03242 10-Q 1 QUARTERLY REPORT ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ---------------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 Commission File Number 0-23098 ---------------------- SOFTDESK, INC. (Exact name of registrant as specified in its charter) Delaware 02-0390273 ------------------------------- --------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 7 LIBERTY HILL ROAD HENNIKER, NEW HAMPSHIRE 03242 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (603) 428-5000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- As of November 8, 1996 issuer had outstanding 6,005,502 shares of Common Stock. ================================================================================ SOFTDESK, INC. AND SUBSIDIARIES TABLE OF CONTENTS Page ---- PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements Condensed Consolidated Balance Sheets as of September 30, 1996 and December 31, 1995. 3 Condensed Consolidated Statements of Income for the three and nine months ended September 30, 1996 and 1995. 4 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 1996 and 1995. 5 Notes to Condensed Consolidated Financial Statements 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 EXHIBIT INDEX 14 -2- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SOFTDESK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA)
SEPTEMBER 30, DECEMBER 31, NOTES 1996 1995 ----- -------------- ------------ (UNAUDITED) (AUDITED) ASSETS Current Assets: Cash and cash equivalents $ 3,214 $ 4,800 Short-term investments 8,143 7,575 Accounts receivable 9,956 11,060 Inventory 614 671 Prepaid expenses and other current assets 4 1,437 1,402 Deferred income taxes 751 751 ---------- ---------- Total current assets 24,115 26,259 ---------- ---------- Plant, property and equipment, at cost: Land 391 409 Buildings and improvements 2,454 2,002 Equipment 6,946 5,853 Furniture and fixtures 302 414 ---------- ---------- 10,093 8,678 Less: Accumulated depreciation (4,717) (4,085) ---------- ---------- 5,376 4,593 Long-term investments 1,854 4,815 Deferred income taxes 103 103 Other assets, net 4 823 247 ---------- ---------- Total assets $32,271 $36,017 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of mortgage payable 3 $ - $ 34 Accounts payable 2,056 3,122 Accrued expenses 3,661 5,179 Customer advances 1,138 1,350 Accrued income taxes - 876 ---------- ---------- Total current liabilities 6,855 10,561 ---------- ---------- Mortgage payable, less current maturities 3 - 1,193 Commitments Stockholders' equity: 5 Preferred stock, $.01 par value - Authorized - 1,000,000 shares; Issued - none - - Common stock, $.01 par value - Authorized - 15,000,000 shares Issued and outstanding - 6,003,709 shares and 5,980,380 shares at September 30, 1996 and December 31, 1995, respectively 60 60 Additional paid-in capital 21,584 21,353 Retained earnings 3,840 2,973 Cumulative translation adjustment (68) (123) ---------- ----------- Total stockholders' equity 25,416 24,263 ---------- ----------- Total liabilities and stockholders' equity $32,271 $36,017 ========== ===========
The accompanying notes are an integral part of these financial statements. -3- SOFTDESK, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, NOTES 1996 1995 1996 1995 ----- ----- ----- ----- ----- NET REVENUES $8,262 $10,776 $26,498 $30,267 COST OF REVENUES 1,514 1,595 4,432 4,278 ------- ------- ------- ------- Gross profit 6,748 9,181 22,066 25,989 OPERATING EXPENSES: Selling and marketing expenses 3,717 3,813 11,191 10,545 Product development expenses 2,302 2,572 7,325 7,428 General and administrative expenses 805 782 2,464 2,152 Non recurring charges - - - 957 ------- ------- ------- ------- Total operating expenses 6,824 7,167 20,980 21,082 Income (loss) from operations (76) 2,014 1,086 4,907 INTEREST INCOME 107 139 385 436 INTEREST EXPENSE - 24 73 61 ------- ------- ------- ------- Income before provision for income taxes 31 2,129 1,398 5,282 PROVISION FOR INCOME TAXES 12 948 531 2,224 ------- ------- ------- ------- NET INCOME $ 19 $ 1,181 $ 867 $ 3,058 ======= ======= ======= ======= NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE 6 $0.00 $0.19 $0.14 $0.50 ======= ======= ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 6 6,022 6,211 6,046 6,156 ======= ======= ======= =======
The accompanying notes are an integral part of these financial statements. -4- SOFTDESK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, NOTES 1996 1995 ----- ---- ---- CASH FLOW FROM OPERATING ACTIVITIES: Net income $ 867 $ 3,058 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 762 1,155 Foreign currency translation 42 (54) Non recurring charges - 957 Changes in assets and liabilities, net of assets acquired in connection with the acquisitions of IdeaGraphix, Inc., Aritek Systems, Inc. and Foresight Resources Corp.: Accounts receivable 1,104 (3,419) Inventory 57 (248) Prepaid expenses and other current 4 (35) (723) assets Accounts payable (1,066) 333 Accrued expenses (1,518) (766) Customer advances (212) 91 Accrued income taxes (876) 554 ------- ------ Net cash provided by (used in) operating activities (875) 938 ------- ------ CASH FLOW FROM INVESTING ACTIVITIES: Purchases of property and equipment, (1,545) (2,187) net Increase in other assets 4 (576) (159) Cash acquired from the acquisition of Foresight Resources Corp. - 28 Cash paid for the acquisitions of IdeaGraphix, Inc. and Aritek Systems, Inc. - (200) Increase in short-term investments (568) (3,942) Decrease in long-term investments 2,961 2,836 ------- ------ Net cash provided by (used in) investing activities 272 (3,624) ------- ------ CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock in connection with the 231 454 exercise of common stock options Payments of note payable - (1,473) Proceeds (payments) on mortgage payable 3 (1,227) 1,124 ------- ------ Net cash provided by (used in) financing activities (996) 105 ------- ------ EFFECT OF FOREIGN CURRENCY TRANSLATION 13 (57) ------- ------ Net decrease in cash and cash (1,586) (2,638) equivalents CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,800 4,209 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,214 $ 1,571 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash used for interest $ 73 $ 61 ======= ======= Cash used for income taxes $ 1,680 $ 1,329 ======= ======= SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES: In January 1996, the Company acquired SOFT-TECH Software Technologie GmbH which was accounted for as a pooling of interests. 2
The accompanying notes are an integral part of these financial statements. -5- SOFTDESK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The unaudited condensed consolidated financial statements presented have been prepared by Softdesk, Inc. and subsidiaries (the "Company") and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial results for the interim periods shown. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim periods or for the entire fiscal year. Certain amounts in the 1995 financial statements have been reclassified to conform to the 1996 presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. Although the Company believes that the disclosures included are adequate to make the information presented not misleading, the condensed consolidated financial statements and the notes included herein should be read in conjunction with the financial statements and notes for the fiscal year ended December 31, 1995 and with the section entitled "Certain Factors That May Affect Future Results" included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. ACQUISITION OF SOFT-TECH SOFTWARE TECHNOLOGIE GMBH On January 22, 1996, the Company acquired SOFT-TECH Software Technologie GmbH ("SOFT-TECH"), a German developer of architectural software for the European marketplace. The Company exchanged 250,000 shares of common stock for all of the share capital of SOFT-TECH. The Company placed 25,000 shares of common stock into escrow as security for the indemnification obligations of the SOFT- TECH stockholders relating to representations, warranties and tax matters. This acquisition has been accounted for as a pooling of interests and accordingly the Company has restated its historical consolidated financial statements. 3. MORTGAGE PAYABLE In March 1995 the Company entered into two agreements with a bank for the mortgage of its building in Germany. The $1,300,000 in proceeds from the mortgage was used to purchase the building. In June 1996 the Company retired the balance of the mortgage. 4. SOFTWARE LICENSING AGREEMENTS In May 1996 the Company signed a software licensing agreement under which it paid approximately $830,000 in prepaid royalties. The Company expects to amortize this amount through December 1998. At September 30, 1996 approximately $700,000 of these royalties was included in prepaid expense and other assets in the accompanying balance sheet. In July 1996 the Company signed a software licensing agreement under which it paid $175,000 for a license fee. The Company expects to amortize this amount through December 1998. At September 30, 1996 approximately $158,000 was included other assets in the accompanying balance sheet. 5. STOCKHOLDERS' EQUITY (a) 1993 Stock Option Plan In December 1993, the Company adopted the 1993 Equity Incentive Plan (the 1993 Plan). Under the terms of the 1993 Plan, the Company may grant -6- either incentive or nonqualified stock options to purchase common stock or awards of restricted common stock to employees and consultants. The Company originally reserved 750,000 shares for issuance under the 1993 Plan. In April 1996, the Board of Directors of the Company approved an increase in the number of shares reserved for issuance under the 1993 Plan to 1,150,000 shares. This increase was approved by the Company's stockholders at the 1996 Annual Meeting of Stockholders, which was held on June 24, 1996 (the "Annual Meeting"). In addition, effective May 1, 1996, the Board of Directors of the Company agreed to offer the Company's then current employees an opportunity to forfeit existing common stock options in exchange for new common stock options at the May 1, 1996 closing price of $13.25 for the Company's common stock as reported by the Nasdaq National Market. The new common stock options are for the same number of shares as the forfeited stock options and the vesting of the new grant mirrors the vesting of the options forfeited. The number of shares covered by previously existing options which were forfeited and subsequently regranted was 351,439. (b) Employee Stock Purchase Plan In January 1996, the Board of Directors of the Company adopted the 1996 Softdesk, Inc. Employee Stock Purchase Plan (the "Employee Plan"). The Employee Plan provides for 250,000 shares of the Company's common stock to be issued in a series of offerings. This plan was approved by the Company's stockholders at the 1996 Annual Meeting. Except for the initial offering, offering periods are 12 months in length commencing each January 1 and July 1 and expire when all shares are issued. The initial offering commenced March 1, 1996 and is 10 months in length. The price at which shares are sold in each offering will be 85% of the closing price of the common stock on the first or last day of each offering period, whichever is lower. Participants may have up to 10% of their qualifying compensation deducted and set aside for purchasing shares in each offering under the Employee Plan. The Employee Plan may be terminated by the Board of Directors at any time. 6. COMPUTATION OF PER SHARE EARNINGS Income per common and common equivalent share is based upon net income for the three and nine months ended September 30, 1996 and 1995. Income per common and common equivalent share has been determined, in accordance with the treasury stock method, by dividing net income by the weighted average number of common and common equivalent shares outstanding during the period computed. Fully diluted and primary income per common share do not differ materially for any of the periods presented. -7- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- On January 22, 1996 Softdesk acquired all the outstanding capital stock of SOFT-TECH Software Technologie GmbH ("SOFT-TECH"), a German based developer of professional architectural software. The transaction was accounted for as a pooling of interests and Softdesk has therefore restated its historical consolidated financial statements and financial information to reflect the combined financial condition and results of operations of the two entities for all periods presented. (See Note 2 to the Condensed Consolidated Financial Statements.) The following discussions refer to the combined consolidated Company. These discussions should be read in conjunction with the Company's 1995 Annual Report on Form 10-K for the year ended December 31, 1995 including the section entitled "Certain Factors That May Affect Future Results". RESULTS OF OPERATIONS: THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 Net revenues decreased approximately 23% in the third quarter of 1996 as compared to the same period in 1995 and decreased 12% during the nine months ended September 30, 1996 as compared to the same period in 1995. The revenue decrease was primarily attributable to the decrease in sales of the Company's high-range professional software products, especially its products for the AutoCAD and AutoCAD related markets, which historically have represented a majority of the Company's total revenues. The Company believes that sales of its software for this market decreased during the three and nine month periods of 1996 because of continued softness in the AutoCAD and AutoCAD related markets. In addition, the Company believes that the decline of its high-range product sales was also a result of customers delaying their software purchases until they completed their purchases of new computer hardware required to transition from a DOS to a Windows operating environment, on which the latest release of AutoCAD and many of the Company's new releases of software are optimized. To a lesser extent, the Company believes that less favorable economic conditions in Europe, especially in the Architecture, Engineering and Construction (AEC) markets, also contributed to the decline of its revenues in the 1996 periods. Partially offsetting the decline in these software sales was an increase in sales of the Company's low to mid-range product lines, including Retail products, which the Company believes was attributable to the release of new products during the 1996 periods combined with an expansion of their "shelf space" in the retail stores that offer these products for sale. International revenues decreased 25% during the third quarter and 21% during the first nine months of 1996 as compared with the same periods in 1995. The declines in international revenues in both of the 1996 periods were primarily caused by reduced revenues from Europe and Canada, partially offset by increases in revenues from Latin America. The Company believes that the declines in European and Canadian revenues were a result of what the Company believes were less favorable economic conditions, especially in the AEC market, in these regions during the 1996 periods. The Company believes that a somewhat stronger U.S. Dollar as measured against the major international currencies during the three and nine month periods of 1996, as compared to the comparable periods in 1995, also contributed to the decline in international revenues. -8- The following table summarizes total net revenues by geographic region (amounts are in thousands):
Three months ended Three months ended Nine months ended Nine months ended September 30, 1996 September 30, 1995 September 30, 1996 September 30, 1995 ------------------- ------------------- ------------------- ------------------- United States $5,868 71% $ 7,572 70% $18,962 72% $20,761 69% Europe 1,540 19 2,210 21 5,144 19 6,722 22 Asia Pacific 408 5 431 4 1,102 4 1,115 4 Other 314 4 253 2 835 3 661 2 Canada 132 1 310 3 455 2 1,008 3 ------ --- ------- --- ------- --- ------- --- $8,262 100% $10,776 100% $26,498 100% $30,267 100%
The Company's revenues are primarily denominated in U.S. Dollars. However, revenues and expenses for foreign operations, particularly the Company's German subsidiary, are usually recorded in the applicable foreign currency and translated with any applicable foreign exchange adjustments. There were no foreign exchange transactions or translation gains or losses that were material to the Company's financial results in either of the three or nine month periods ended September 30, 1996 and 1995. In addition, during these periods the Company's financial results were not materially affected by inflation. Total costs and expenses increased to 101% of net revenues in the third quarter of 1996 from 81% of net revenues in the same quarter of 1995. For the nine months ended September 30, 1996 total costs and expenses increased to 96% of net revenues from 84% of net revenues during the same period in 1995. During this period, revenue decreased 23% on a quarterly comparative basis and 12% on a nine month comparative basis. As a percentage of revenue, the 20 percentage point quarterly comparative increase in total costs and expenses consisted of an approximate 3 percentage point increase in the cost of revenues and a 17 percentage point increase in operating expenses. As a percentage of revenue, the 12 percentage point nine month comparative increase in total costs and expenses consisted of a 3 percentage point increase in the cost of revenues and a 9 percentage point increase in operating expenses. These items are discussed below. The Company's headcount totaled 243 at the end of September 1996 as compared to 263 at the end of September 1995. The decrease in average headcount in 1996 contributed to the Company's reduction in its total operating expenses, in absolute dollars, during the 1996 periods. The Company's headcount had increased slightly to 245 as of November 8, 1996. Gross profit margin decreased to approximately 82% in the third quarter of 1996 from 85% in the third quarter of 1995. For the nine months ended September 30, 1996 gross profit margin decreased to approximately 83% from 86% during the comparable period of 1995. The decreases were primarily attributable to a shift in the Company's overall product mix toward lower margin products which included the Company's low to mid-range product lines, increased pricing pressures, and, to a lesser extent, to the lack of the benefit achieved through economies of scale, which usually occur with increasing revenues, as was the case during the three and nine month periods of 1995. Softdesk continues to monitor and react to market events and developments in an attempt to improve its gross margin levels. Selling and marketing expenses, which include distribution, marketing, and training, represented 45% of net revenues in the third quarter of 1996 and 42% of net revenues during the first nine months of 1996 as compared to approximately 35% of net revenues in each of the comparable 1995 periods. Total selling and marketing expenses decreased 3% in the third quarter of 1996 and increased 6% in the first nine months ended September 30, 1996 from their totals in the comparable periods of 1995. The decrease in the comparative quarterly expense total was primarily a result of a reduced average headcount and a decrease in total commission expense during the -9- third quarter of 1996. The increase in the comparative nine month expense total resulted from increased trade shows, public relations and advertising expenses, as well as personnel expenses. As the Company attempts to expand its sales and marketing programs during the next year, in an effort to increase its market share and revenues, increased expenditures in sales and marketing may occur. Product development expenses, which consist primarily of developers' wages and benefits, represented 28% of net revenues in both the third quarter of 1996 and the first nine months of 1996 as compared to 24% of net revenues in the third quarter of 1995 and 25% in the first nine months of 1995. Total product development expenses decreased 10% in the third quarter of 1996 and they decreased 1% in the first nine months of 1996 from their totals in the comparable periods of 1995. The decreases in product development expenses were primarily a result of a lower average headcount and less subcontractor labor during the 1996 periods, as compared to the similar periods in 1995. There were no capitalized product development costs, as determined in accordance with Statement of Financial Accounting Standards No. 86 in either the 1996 or the 1995 periods. The Company may increase its product development expenses or make acquisitions of third party technologies during the next twelve months to keep pace with the technological needs of the marketplace, to improve and expand the Company's product lines and to respond to its customers' needs. General and administrative expenses, which include the costs of the Company's corporate finance, human resource and administrative functions, represented 10% of net revenues for the third quarter of 1996 and 9% of the 1996 nine month net revenues, as compared to 7% of net revenues in each of the comparable periods in 1995. Total G&A expenses increased 3% in the third quarter of 1996 and approximately 14% in the first nine months of 1996 from their respective totals in the comparable periods in 1995. The increases in G&A expenses were primarily due to increased salaries, bad debt expense and higher professional fees. These increases were somewhat offset by savings generated by the continued centralization and consolidation of administrative functions on a company-wide basis. Additional resources may be invested in the general and administrative areas as required by the Company's future growth. The Company recorded a non-recurring charge of $957,000 in the nine months ended September 30, 1995. This charge represented a write-off of purchased research and development relating to its acquisitions in the second quarter of 1995 and the Company's periodic assessment of its realizable purchased product development. There was no such charge during 1996. Net interest income decreased 7% in the third quarter of 1996 and decreased 17% in the nine months ended September 30, 1996 as compared to the applicable periods in 1995. The net decreases were primarily due to lower cash balances earning interest during the 1996 periods as well as to higher interest expense in the first nine months of 1996 as compared to the comparable 1995 period,from a mortgage related to the purchase of facility space in Germany. This mortgage was retired at the end of June 1996. The Company's consolidated provision for income taxes decreased 99% in the third quarter of 1996 as compared to the third quarter of 1995 and it decreased 76% in the first nine months of 1996 as compared to the same period in 1995, due to the decreased pretax earnings in the applicable periods of 1996. The Company's effective income tax rate decreased to approximately 38% in each of the 1996 periods from 45% in the third quarter of 1995 and 42% in the first nine months of 1995 primarily due to the level of foreign tax provisions and the taxability of certain of the 1995 non recurring charges included in the accompanying statements of income. -10- The Company's net income in the third quarter of 1996 was $19,000, or $.00 per share, as compared to net income in the third quarter of 1995 of $1,181,000, or $.19 per share. Net income for the nine months ended September 30, 1996 totaled $867,000, or $.14 per share, as compared to $3,058,000, or $.50 per share for the nine months ended September 30, 1995. LIQUIDITY AND CAPITAL RESOURCES The Company is currently satisfying its operating cash requirements from its existing cash balances. As of September 30, 1996, the Company had cash, cash equivalents, short and long term investments of $13,211,000 as compared to $17,190,000 at December 31, 1995. The decrease in total cash and investments during the nine months ended September 30, 1996 was attributable primarily to the Company's payment of income taxes ($1,680,000), the net investment in capital assets ($1,545,000), the retirement of a mortgage on a facility in Germany ($1,227,000), the completion of a software licensing contract including prepaid royalties ($830,000), and, to a lesser extent, funds used to complete the SOFT-TECH acquisition. During the nine months ended September 30, 1996 the Company received $231,000 from the exercise of stock options and reduced its net accounts receivable by approximately $1,104,000. The purchase of property and equipment was primarily related to the addition of facility space, computer equipment and software including a new corporate MIS and telecommunication system. Planned future capital expenditures are not expected to have an overall material effect on the Company's cash position or its operations during the next 12 months. During the first nine months of 1996 and 1995 the Company invested its cash reserves mainly in debt securities, with maturities of less than 2 years, issued by the U.S. treasury, other U.S. government agencies and political subdivisions of the states and municipalities. The Company expects to continue similar conservative investment policies in the future. The Company believes that its existing cash, investments and projected funds from operations will satisfy the Company's working capital and operating needs for at least the next 12 months. -11- PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 11.1 Computation of Per Share Earnings. Exhibit 27 Financial Data Schedule (EDGAR) (b) Reports on Form 8-K No reports on Form 8-K were filed during the three months ended September 30, 1996 or subsequently through the date of this report. -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SOFTDESK, INC. Date: November 8, 1996 By: /s/ David C. Arnold -------------------------------- DAVID C. ARNOLD, PRESIDENT & CHIEF EXECUTIVE OFFICER Date: November 8, 1996 By: /s/ John A. Rogers -------------------------------- JOHN A. ROGERS, VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER) -13- EXHIBIT INDEX ------------- PAGE ---- 11.1 Computation of Per Share Earnings 15 27 Financial Data Schedule (EDGAR) 16 -14- EX-11.1 2 STATEMENT RE COMP OF PER SHARE EARNINGS EXHIBIT 11.1 COMPUTATION OF PER SHARE EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, -------------------- ------------------- WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 1996 1995 1996 1995 -------- -------- -------- ------- Common Stock 6,004 5,955 5,997 5,935 Common equivalent shares resulting from stock options issued (treasury stock method) 18 256 49 221 ------ ------ ------ ------ Total 6,022 6,211 6,046 6,156 ====== ======= ====== ======= Net income applicable to common stock $ 19 $1,181 $ 867 $3,058 ====== ====== ====== ====== Net income per common stock $ 0.00 $ 0.19 $ 0.14 $ 0.50 ====== ====== ====== ======
1 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1996 JUL-01-1996 SEP-30-1996 3,214 8,143 9,956 0 614 24,115 5,376 4,717 32,271 6,885 0 0 0 60 25,356 32,271 8,262 8,262 1,514 8,338 0 0 0 31 12 19 0 0 0 19 0.00 0.00
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